Use of Network Techniques
-
Upload
ripudaman-bhatnagar -
Category
Documents
-
view
218 -
download
0
Transcript of Use of Network Techniques
-
8/7/2019 Use of Network Techniques
1/38
Use of Network Techniques
CPM and PERT
-
8/7/2019 Use of Network Techniques
2/38
Introduction
In 1957, DuPont developed a project
management method designed to addressthe challenge of shutting down chemical
plants for maintenance and then restarting
the plants once the maintenance had been
completed. Given the complexity of theprocess, they developed the Critical Path
Method (CPM) for managing such projects.
-
8/7/2019 Use of Network Techniques
3/38
Benefits
CPM provides the following benefits:
Provides a graphical view of the project.
Predicts the time required to complete the
project.
Shows which activities are critical tomaintaining the schedule and which are not.
-
8/7/2019 Use of Network Techniques
4/38
CPM Model
CPM models the activities and events of a
project as a network. Activities are depicted as nodes on the
network and events that signify the beginning
or ending of activities are depicted as arcs or
lines between the nodes.
The following is an example of a CPM
network diagram:
-
8/7/2019 Use of Network Techniques
5/38
CPM Diagram
-
8/7/2019 Use of Network Techniques
6/38
CPM chart with 8 milestones and 9 activities.
-
8/7/2019 Use of Network Techniques
7/38
Steps in CPM Project Planning
Specify the individual activities.
Determine the sequence of those activities. Draw a network diagram.
Estimate the completion time for each activity.
Identify the critical path (longest path through the
network) Update the CPM diagram as the project
progresses.
-
8/7/2019 Use of Network Techniques
8/38
1.Specify the Individual Activities
From the work breakdown structure, a listing
can be made of all the activities in theproject. This listing can be used as the basis
for adding sequence and duration
information in later steps.
-
8/7/2019 Use of Network Techniques
9/38
-
8/7/2019 Use of Network Techniques
10/38
3. Draw the Network Diagram
Once the activities and their sequencing
have been defined, the CPM diagram can bedrawn.
-
8/7/2019 Use of Network Techniques
11/38
4. Estimate Activity Completion Time
The time required to complete each activity
can be estimated using past experience orthe estimates of knowledgeable persons.
CPM is a deterministic model that does not
take into account variation in the completion
time, so only one number is used for anactivity's time estimate.
-
8/7/2019 Use of Network Techniques
12/38
5.Identify the Critical Path
The critical path is the longest-duration path
through the network. The significance of the critical path is that
the activities that lie on it cannot be delayed
without delaying the project. Because of its
impact on the entire project, critical pathanalysis is an important aspect of project
planning.
-
8/7/2019 Use of Network Techniques
13/38
|Critical path can be identified bydetermining the following fourparameters for each activity:
ES - earliest start time: the earliest time at which the activitycan start given that its precedent activities must be completed
first.
EF - earliest finish time, equal to the earliest start time for theactivity plus the time required to complete the activity.
LF - latest finish time: the latest time at which the activity canbe completed without delaying the project.
LS - latest start time, equal to the latest finish time minus thetime required to complete the activity.
-
8/7/2019 Use of Network Techniques
14/38
The slack time
The slack time for an activity is the time
between its earliest and latest start time, orbetween its earliest and latest finish time.
Slack is the amount of time that an activity
can be delayed past its earliest start or
earliest finish without delaying the project.
-
8/7/2019 Use of Network Techniques
15/38
The critical path is the path through the
project network in which none of the activitieshave slack, that is, the path for which ES=LS
and EF=LF for all activities in the path. A
delay in the critical path delays the project.
Similarly, to accelerate the project it isnecessary to reduce the total time required
for the activities in the critical path.
-
8/7/2019 Use of Network Techniques
16/38
6. Update CPM Diagram
As the project progresses, the actual task
completion times will be known and thenetwork diagram can be updated to include
this information. A new critical path may
emerge, and structural changes may be
made in the network if project requirementschange.
-
8/7/2019 Use of Network Techniques
17/38
CPM Limitations
CPM was developed for complex but fairly
routine projects with minimal uncertaintyin the project completion times. For less routine projects there is more uncertainty in
the completion times, and this uncertainty limits theusefulness of the deterministic CPM model.
An alternative to CPM is the PERT project planningmodel, which allows a range of durations to bespecified for each activity.
-
8/7/2019 Use of Network Techniques
18/38
PERT
While CPM is easy to understand and use, it
does not consider the time variations thatcan have a great impact on the completion
time of a complex project.
The Program Evaluation andReview
Technique (PERT) is a network model thatallows for randomness in activity completion
times.
-
8/7/2019 Use of Network Techniques
19/38
The Network Diagram
In a project, an activity is a task that must be
performed and an event is a milestone marking thecompletion of one or more activities. Before an
activity can begin, all of its predecessor activities
must be completed. Project network models
represent activities and milestones by arcs and
nodes. PERT originally was an activityon arcnetwork, in which the activities are represented on
the lines and milestones on the nodes
-
8/7/2019 Use of Network Techniques
20/38
Example of a PERT diagram
-
8/7/2019 Use of Network Techniques
21/38
-
8/7/2019 Use of Network Techniques
22/38
The milestones generally are numbered so
that the ending node of an activity has ahigher number than the beginning node.
Incrementing the numbers by 10 allows fornew ones to be inserted without modifyingthe numbering of the entire diagram.
The activities in the above diagram arelabeled with letters along with the expectedtime required to complete the activity.
-
8/7/2019 Use of Network Techniques
23/38
Steps in the PERT Planning Process
Identify the specific activities and milestones.
Determine the proper sequence of the activities. Construct a network diagram.
Estimate the time required for each activity.
Determine the critical path.
Update the PERT chart as the project progresses.
-
8/7/2019 Use of Network Techniques
24/38
1. Identify Activities and Milestones
The activities are the tasks required to
complete the project. The milestones are theevents marking the beginning and end of one
or more activities.
It is helpful to list the tasks in a table that in
later steps can be expanded to includeinformation on sequence and duration.
-
8/7/2019 Use of Network Techniques
25/38
2. Determine Activity Sequence
This step may be combined with the activity
identification step since the activity sequenceis evident for some tasks.
Other tasks may require more analysis to
determine the exact order in which they must
be performed.
-
8/7/2019 Use of Network Techniques
26/38
3. Construct the Network Diagram
Using the activity sequence information, a networkdiagram can be drawn showing the sequence of the
serial and parallel activities. For the original activity-on-arc model, the activities
are depicted by arrowed lines and milestones aredepicted by circles or "bubbles".
If done manually, several drafts may be required to
correctly portray the relationships among activities. Software packages simplify this step by
automatically converting tabular activity informationinto a network diagram.
-
8/7/2019 Use of Network Techniques
27/38
4. Estimate Activity Times
Weeks are a commonly used unit of time for
activity completion, but any consistent unit oftime can be used.
A distinguishing feature of PERT is its ability
to deal with uncertainty in activity completion
times.
-
8/7/2019 Use of Network Techniques
28/38
For each activity, the model usually
includes three time estimates
Optimistic time - generally the shortest time in which the activitycan be completed. It is common practice to specify optimistic
times to be three standard deviations from the mean so thatthere is approximately a 1% chance that the activity will becompleted within the optimistic time.
Most likely time - the completion time having the highestprobability. Note that this time is different from the expectedtime.
Pessimistic time - the longest time that an activity might require.Three standard deviations from the mean is commonly used forthe pessimistic time.
-
8/7/2019 Use of Network Techniques
29/38
PERT assumes a beta probability distribution for the timeestimates. For a beta distribution, the expected time for each
activity can be approximated using the following weightedaverage:
Expected time = ( Optimistic + 4 x Most likely + Pessimistic ) / 6
This expected time may be displayed on the network diagram.
To calculate the variance for each activity completion time, ifthree standard deviation times were selected for the optimisticand pessimistic times, then there are six standard deviationsbetween them, so the variance is given by:
[ ( Pessimistic - Optimistic ) / 6 ]2
-
8/7/2019 Use of Network Techniques
30/38
5. Determine the Critical Path
The critical path is determined by adding the timesfor the activities in each sequence and determining
the longest path in the project.
The critical path determines the total calendar timerequired for the project. If activities outside thecritical path speed up or slow down (within limits),the total project time does not change.
The amount of time that a non-critical path activitycan be delayed without delaying the project isreferred to as slack time.
-
8/7/2019 Use of Network Techniques
31/38
If the critical path is not immediately obvious,
it may be helpful to determine the followingfour quantities for each activity:
ES - Earliest Start time
EF - Earliest Finish time
LS - Latest Start time
LF - Latest Finish time
-
8/7/2019 Use of Network Techniques
32/38
These times are calculated using the expected time for therelevant activities. The earliest start and finish times of each
activity are determined by working forward through the networkand determining the earliest time at which an activity can startand finish considering its predecessor activities. The latest startand finish times are the latest times that an activity can startand finish without delaying the project. LS and LF are found byworking backward through the network. The difference in the
latest and earliest finish of each activity is that activity's slack.The critical path then is the path through the network in whichnone of the activities have slack.
-
8/7/2019 Use of Network Techniques
33/38
The variance in the project completion time can be
calculated by summing the variances in the
completion times of the activities in the critical path.
Given this variance, one can calculate the probability
that the project will be completed by a certain date
assuming a normal probability distribution for the
critical path. The normal distribution assumptionholds if the number of activities in the path is large
enough for the central limit theorem to be applied.
-
8/7/2019 Use of Network Techniques
34/38
Since the critical path determines the
completion date of the project, the projectcan be accelerated by adding the resources
required to decrease the time for the
activities in the critical path. Such a
shortening of the project sometimes isreferred to as project crashing.
-
8/7/2019 Use of Network Techniques
35/38
6. Update as Project Progresses
Make adjustments in the PERT chart as the
project progresses. As the project unfolds,the estimated times can be replaced with
actual times. In cases where there are
delays, additional resources may be needed
to stay on schedule and the PERT chart maybe modified to reflect the new situation.
-
8/7/2019 Use of Network Techniques
36/38
Benefits of PERT
PERT is useful because it provides the followinginformation:
Expected project completion time.
Probability of completion before a specified date.
The critical path activities that directly impact thecompletion time.
The activities that have slack time and that can lendresources to critical path activities.
Activity start and end dates.
-
8/7/2019 Use of Network Techniques
37/38
Limitations
The activity time estimates are somewhat subjective anddepend on judgement. In cases where there is little experiencein performing an activity, the numbers may be only a guess. Inother cases, if the person or group performing the activityestimates the time there may be bias in the estimate.
Even if the activity times are well-estimated, PERT assumes abeta distribution for these time estimates, but the actualdistribution may be different.
Even if the beta distribution assumption holds, PERT assumes
that the probability distribution of the project completion time isthe same as the that of the critical path. Because other pathscan become the critical path if their associated activities aredelayed, PERT consistently underestimates the expectedproject completion time.
-
8/7/2019 Use of Network Techniques
38/38
The underestimation of the project
completion time due to alternate pathsbecoming critical is perhaps the most serious
of these issues. To overcome this limitation,
Monte Carlo simulations can be performed
on the network to eliminate this optimisticbias in the expected project completion time.